Buying Below Market Value From Estate Agents
Many people just don’t buy so called below market value (BMV) property through estate agents – they think they will not be able to get great deals that way.
But at LettingFocus.com we disagree and we often get good deals this way. So how do we do it?
Buying Below Market Value from an Estate Agent
Well, the first thing is that estate agents are usually busy people – and they have lots of people who also want to buy property cheaply – everyone in fact wants something for below the going rate!
Your job is to convince them you really can move fast and you will not let them down. You can make their job easier – get the sale done and get them their commission.
First, show them you are good for the money. Right now we are cash buyers, so that helps a lot. It means we can move fast. We don’t have to hang about waiting for a surveyor to come out and value the property for a lender and then wait for another few weeks whilst the mortgage lender’s processes clunk into action and they finally deign to grant us a mortgage. (We have a surveyor/ builder who will take a quick look around and tell us verbally if the place looks OK for a small fee, but that can be done next day).
Second, have a good conveyancer who can move fast. Not easy to find one, I know. And sorry, you cannot have the phone number of mine! Not even my personal consulting clients get that.
Third, make it worth the estate agents while. We always offer them the letting (tenant find) business once we have bought the property, so they will get something else (on top of their commission for selling from the vendor).
We don’t offer sweeteners (bribes) to the estate agents as we think this is a little immoral and it places the agent in a difficult position – they are supposed to be the agent of the seller, after all! However, we know this goes on, especially with very dilapidated properties which are being bought as major refurbishment projects (where builders are often the main buyers).
Just trying to get on with the estate agents and treating them with courtesy and respect goes a long way, we find.
Not having the delay of waiting for a mortgage means we can move fast – which is very much of interest to any vendor who wants to move sell quickly – we call them “motivated vendors”. So, someone who in in a chain and who has their heart set on buying a property and whose own buyer has just pulled out at the last minute, will be willing to listen to our cheeky offer. If we can exchange fast, they may well accept a lower price so they can still complete on their dream house, so they will be happy too. We have solved their problem.
We make regular visits to keep in touch with the estate agents. We tell them we are not interested in attending “open days”. We tell them to only call us if they have a property where the vendor needs to exchange fast (as in the case of a chain where their buyer has walked away as explained above) or for some other reason – often death and divorce feature highly.
It might be weeks before the right situation comes along – which is why we keep going down to say “Hi” to the agents every few weeks, to remind them we are still around and waiting. We also show them we still have the funds – we bring bank statements and other financial statements to prove this.
Services to Businesses and the Public Sector
We advise a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their services and products for private landlords. David Lawrenson, founder of LettingFocus, also writes for property portals, speaks at property events and is regularly quoted by the media.
Services for Private Landlords
We help landlords and property investors by showing them how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk.
Our advice is completely independent. We take don’t commission payments or fees from anyone, ever.
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